Where to stay in Iceland
Iceland's accommodation scene runs from $45 hostel bunks to $1,600 lagoon suites. Location matters more than star rating — here is where to base yourself depending on trip length and style.
Boutique hotel room with view of Icelandic coastline
Reykjavik: the default base
Stay in the 101 postcode. Laugavegur and Skolavordustigur put you within a 10-minute walk of most restaurants and bars. Hotel Borg on Austurvollur ($400) is the classic. Kvosin Downtown Hotel ($280) has apartment-style rooms. Sand Hotel by Keahotels on Laugavegur ($240) is well-located mid-range.
For budget, Kex Hostel ($45 dorm/$150 private) on Skulagata has the best atmosphere. Avoid hotels in Kopavogur or Hafnarfjordur suburbs — cheaper but you will spend $30 a day on taxis.
Near the Blue Lagoon and airport
For arrival or departure nights, Silica Hotel ($480) and the Retreat ($1,600) put you in the lagoon complex itself. Northern Light Inn ($260) is a 5-minute drive away and cheaper.
In Keflavik town, Hotel Berg ($200) overlooks the marina and does a great breakfast. Skip generic airport hotels — Keflavik town is prettier and the same distance.
Ring Road bases
For the South Coast, Hotel Ranga near Hella ($480) is the aurora lodge with hot tubs. Vik has Icelandair Hotel Vik ($220) and Puffin Hotel Vik ($180). In the east, Fosshotel Glacier Lagoon ($340) is the only real option near Jokulsarlon.
North: Kea Hotel Akureyri ($240) or Hotel Kjarnalundur ($200) in the birch woods. Myvatn: Fosshotel Myvatn ($290).
Farm stays and country hotels
Hey Iceland (heyiceland.is) lists working farms with rooms from $130 including breakfast. Efstidalur near Laugarvatn has the ice cream shop and hot tubs. Vogafjos in Myvatn is a functioning dairy where the restaurant looks into the milking parlour.
These are the best value in Iceland if you have a car.
Frequently asked questions
What people ask before they set off on this one.
Reykjavik for anything longer than one night. Keflavik or Blue Lagoon area only for very late arrivals or early departures.
Budget $180-250 for mid-range, $350-500 for upscale, $45-70 for hostels. Prices peak June-August.
Yes, but rentals over 90 days per year need registration. Selection has shrunk in Reykjavik due to regulation.
Usually not — the climate does not need it. Windows open, and some rooms use geothermal underfloor heating you can control.
Hotels in Iceland
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